Your debt consolidation lender may profit off of the fact that you'll be paying interest for a longer period of time, but you will benefit by getting a longer term in which to repay your debt. Most high interest debts have short repayment periods, but you can choose the length of your debt consolidation loan, so you can make smaller payments over a longer period of time, often up to five years.
When considering debt consolidation, you want to begin by calculating how much money you would save with a debt consolidation loan. You can easily find online debt consolidation calculators to estimate your savings, and this will help you to decide if debt consolidation is the route you should take. It is advantageous to take a careful look at several debt consolidation loan offers from different banks and credit unions.
To take advantage of this scheme, which takes better care of your credit score than debt management or debt negotiation, you often have to prove your monthly income and expenses, and provide collateral or a co-signer. Your main concern when considering a debt consolidation loan is that you make sure you are getting a significantly lower interest rate than those you have on the loans and debts you want to consolidate. Ask about the fees involved with the loan, and verify that they will not interfere with your repayment plan. And, educate yourself on the effect this debt consolidation will have on your credit record. With a debt consolidation loan, there should be little to no affect on your credit history as long as you make your payments on time each month.